American Re Corporation reported a 2005 fourth-quarter net loss of $213.8 million, partially stemming from realized capital losses of $81.9 million and a tax charge.
The Princeton, N.J.-based subsidiary of Munich Re also reported a full-year net loss of $1.6 billion, primarily as a result of a $1.4 billion reserving charge in the second quarter, compared with net earnings of $103.1 million for 2004.
The fourth-quarter figure compares to a loss of $90.6 million for the same period in 2004.
The 2005 tax charge of $178.7 million resulted mainly from establishing a contingency reserve for risks associated with the tax treatment of the company's retrocession agreements with Munich Re.
Gross premiums written in the fourth quarter were $875.5 million, which represented a 10 percent decline from the $974.2 million in the fourth quarter of 2004.
The company's combined ratio for the quarter was 87.1, compared with 147.8 in the fourth quarter of 2004.
American Re Chairman John Phelan said that although reserve strengthening had a significant impact on results, operating results were strong.
"As a result of Munich Re's commitment to American Re and the U.S. market, we are well positioned to turn risk into value for our clients and stakeholders," he said.
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